Government intervention aims to stabilize China’s solar market
China’s government has pledged to support struggling solar manufacturers by guiding capacity expansions and preventing redundant investments.
Li Chuangjun, director of the agency’s renewable energy department, announced at a press briefing that the National Energy Administration will oversee solar factory utilization and expansion plans to enhance market conditions.
This commitment follows appeals from solar companies for Beijing’s intervention after a surge in capacity led to a collapse in equipment prices and company profits.
Read more: Chinese solar industry urges government action amid price plunge
Li added at the briefing in Beijing, “We will reasonably guide the construction and release of upstream production capacity, avoid duplicate construction of low-end production capacity, and strive to create a good market environment.”
Executives from companies such as Trina Solar Co. and GCL Technology Holdings Ltd. called for greater government intervention at the industry’s largest annual gathering in Shanghai last week.
Industry insiders have warned of imminent bankruptcies, and BloombergNEF analysts reported that they do not anticipate a market recovery until 2025 or 2026.
Curbing the solar industry’s expansion will take time to impact a market where total production capacity will nearly double the demand by the end of 2023. This measure may also benefit international markets, as governments in regions such as the US and Europe are increasingly scrutinizing Chinese supply chains for potentially crowding out their domestic competitors.
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